Kroger introduced Ocado’s first automated online grocery warehouse this week in Monroe, Ohio, one of 20 planned in the US with the UK’s e-grocery specialist.
Kroger said the Monroe Customer Happening Center (CFC), which is about 375,000 square feet, carries thousands of popular grocery products and can fulfill thousands of deliveries orders every day. The facility can also support the fulfillment of receiving orders. The Monroe CFC debut comes around 22 months after Kroger started the nearly $ 55 million facility. Kroger announced the initial launch of the CFC when reporting its fiscal year 2020 results in early March.
“We have been transforming the company constantly, and that’s another development in that transformation,” said Rodney McMullen, Chairman and CEO of Kroger, Wednesday at a virtual press conference about the Monroe CFC launch.
“If you look at the last few years, and especially in 2020, they have been a pivotal year for e-grocery commerce. We ended last year with over $ 10 billion in e-commerce revenue, and we grew 116% year-over-year. One of the things we have committed to. Is that by 2023, we will double our digital business in the future. This really makes Kroger one of the leading e-commerce platforms and companies in America.”
Using artificial intelligence, advanced robotics, and automation, Monroe CFC is designed to provide more seamless and efficient execution, picking, and delivery of Kroger’s online grocery orders. Inside, there are more than 1,000 robots containing bags of pre-made products and customer orders that move through massive 3D networks – dubbed “The Hive” – that are managed by air traffic control systems. When order delivery times approach, robots retrieve products from The Hive and bring them to pick-up stations, where items are sorted for delivery. Algorithm’s control picking and sorting to ensure products are intelligently packed, with fragile items on top and bags evenly weighted.
Then, the packed orders are loaded into a Kroger Delivery truck which is temperature controlled and can hold up to 20 orders. Machine learning algorithms weigh factors such as road conditions and fuel efficiency to optimize delivery routes. Each CFC covers a delivery radius of up to 90 miles. Upon unveiling their partnership in May 2018, Kroger and Ocado Group said they plan to open 20 CFCs in the United States over the next three years. To date, Kroger has announced 10 CFCs. With areas ranging from 135,000 to 375,000 square feet. Besides the Monroe facility, it includes locations in Groveland, Florida; Forest Park, Georgia; Dallas. Frederick, Maryland; Phoenix. Pleasant Prairie, Wisconsin; And Romulus, Michigan, plus two unspecified locations in the Pacific Northwest and West. Depending on its size, Ocado CFC will equal sales of about 20 stores, according to Kroger. At full capacity, annual per-unit sales – the Monroe CFC has seven units – is expected to range from $ 80 million to $ 100 million.
The Kroger Delivery network will also include smaller facilities as well as magnified locations that will expand the area each CFC serves beyond the 90-mile radius. The Groveland facility, which is now under test launch and is expected to start fulfilling customer orders later this spring, represents a new market area for Kroger – Florida, where it currently has no stores. We’re really excited about Florida. When you look at the research, we find that in different parts of the state, Kroger has a different name distinction. But when you look at the state in general, about 55% of customers know the Kroger name, and they know we’re in the grocery business.” And we have a lot of respect for the freshness of our products, friendly service, our own brands and those things, McMullen said during a Q&A, adding that Florida has a large number of people who have moved there from the Midwest. What are your thoughts on this? Have you tried the new delivery app? What is your experience? Let us know in the comment section below!